Goldman Sachs keeps HKEX Buy at HKD540 on record IPO queue

Hong Kong Exchanges and Clearing Ltd. (00388.HK) rose 1.7 percent to HK$410.20 after Goldman Sachs kept its Buy rating and HK$540 price target, citing a record-high IPO application queue that management flagged at an investor event.

The exchange operator's listing pipeline, combined with structural growth in derivatives, supports strong momentum in average daily turnover, Goldman analysts wrote in a research report. The broker estimates further upside for the Shanghai- and Shenzhen-Hong Kong Stock Connect, noting that fewer than 5 percent of A-share retail investors currently trade through the channel.

Goldman projects the 2026 IPO pipeline will exceed last year's 119 listings, a wave expected to contribute double-digit ADT growth. To broaden its derivatives footprint, HKEX is studying the launch of zero-day options, with most development work on the Orion derivatives platform slated for completion in 2026 and technical readiness targeted for 2027. The exchange is also exploring extending derivatives trading hours to cover US market closing hours.

The HK$540 target implies roughly 32 percent upside from the current price, and the stock remains on Goldman's Conviction List Buy. Short selling reached HK$236.35 million on the session, a ratio of 24.462 percent of turnover, according to data as of Sept. 3.

The maintained rating signals the broker expects the listing revival and derivatives build-out to lift fee income through 2026. Investors will watch HKEX's next monthly turnover and IPO filing data for confirmation that the application queue converts into completed listings.

This article is for informational purposes only and does not constitute investment advice.